AirAsia uses fuel savings to launch half-price deals

Malaysian low-cost carrier AirAsia has launched an ASEAN half-price promotion in the wake of the Flight QZ8501 crash in December that killed 162 people, with the carrier able to introduce the campaign because of its high jet-fuel hedging.

The AirAsia ASEAN Pass and AirAsia ASEAN Pass+ are prepaid packages that allow passengers to lock down base fares with credits and redeem them later to travel across the 10 ASEAN nations: Malaysia, Brunei, Singapore, Indonesia, Myanmar, Thailand, Vietnam, Laos, Cambodia and the Philippines.

Passengers must complete their travel within 30 days of purchasing a Bt5,300 ticket and 60 days for the Bt9,300 ticket.

AirAsia group chief executive Tony Fernandes said the carrier hedged the jet-fuel price at about US$80 per barrel in January. He said the airline's portion of hedging had increased from 20 per cent to 50 per cent this year and would last for several months.

Low oil a big boost

"The lowering of oil prices is great for our business," he added.

Fernandes said AirAsia aimed to maintain the proportion of passengers travelling throughout ASEAN at 55 per cent of its total Southeast Asia passengers.

He said it was hoped people from other regions would take advantage of the promotion when travelling throughout the region.

A passenger target under the promotion had not been set, but it was expected to boost business.

Fernandes said the group was considering creating packages that would service more destinations.

He said AirAsia did not wait for a government to develop infrastructure that served the airline industry before implementing its strategic plans.

Last year, AirAsia had 55 million passengers. Tassapon Bijleveld, chief executive of Thai AirAsia, said the |airline hoped the new promotion would boost passenger numbers |for the domestic and overseas markets.

Tassapon said the airline aimed to achieve 14.5 million passengers this year, up from 12.2 million last year, with the average load factor expected to increase from 78 per cent in 2014 to more than 80 per cent this year.

Thai AirAsia is sets to operate in three destinations in China this year when five new aircraft arrive.